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Increased IPA Supply Helps Fuel Growth

There’s positive news for those in craft brewing who are increasing production capacity – especially if they are making American IPAs. Statistics confirm that established companies brewing more American IPA are helping to drive craft’s fastest growing category and craft’s increase in overall market share.

The IPA experienced another year of strong growth in 2014, grossing $342 million in supermarkets alone, for an increase of 41 percent over the previous year, according to IRI, a Chicago-based market research firm.
“Craft’s growth is being fueled by many different suppliers, brands, new products, macro consumer packaged goods trends and changing consumer demand,” said Dan Wandel, principal of Beverage Alcohol Clients Insights for IRI.

“The sales growth we are seeing for IPA’s within the craft segment is unprecedented,” he added.

Some of that growth results from increased brewing capacity. Expansion and added facilities have been a boon to Lagunitas, which opened a new brewery in Chicago in 2014, providing a more direct path to distribution east of the Mississippi. Lagunitas increased its IPA sales in supermarkets by more than 50 percent in 2014.

When Sierra Nevada Brewing Company opened its new brewery in Mills River, N.C., in April of last year, it immediately began selling its popular Torpedo Extra IPA, which filled distribution channels as Torpedo supermarket sales increased by six percent. (In terms of total volume, Lagunitas IPA and Sierra Nevada Torpedo were about even for supermarket sales in 2014.)

Newly introduced IPA brands also helped spur growth for major craft players. Sam Adams Rebel IPA led the charge with sales over $21 million after its nationwide release in January of 2014, followed by Deschutes Freshly Squeezed IPA clocking in at $3 million.

Growth wasn’t just limited to major players. The data tracked a 15.5 percent rise in craft IPA brands overall during the past year for a total of 1,165 different IPAs available in supermarkets with certain IPA subcategories faring better than others.

American IPAs led the pack with more than $217 million in sales, followed by Double IPAs at $85 million. Session IPAs, the next most popular style at $11 million, demonstrated explosive growth of 339 percent compared to 2013.

In fact, only Belgian, red, rye and brown IPAs experienced a drop in supermarket sales. The Belgian type declined 21.5 percent and the other three by 12.2 percent.

With style additions such as fresh hop, hop resin and distilled hop oil IPAs coming to market as well as coast-to-coast expansion slated for New Belgium Brewing Company, Green Flash Brewing Company and Stone Brewing Company, the IPA pipeline is likely to continue to expand.